mortgage lender Archives - Page 87 of 119

Apache is functioning normally

May 29, 2023 by Brett Tams

Today we’ll take a look at the top mortgage lenders in Ohio.

Last year, nearly 1,000 mortgage companies originated about $113 billion in home loans there.

But one company dominated the rest by a fairly large margin.

Surprisingly, it wasn’t the nation’s top mortgage lender, but rather a depository bank.

Read on to see who took the top spot and what other companies did a lot of business in The Buckeye State.

Top Mortgage Lenders in Ohio (Overall)

Ranking	Company Name	2021 Loan Volume
1.	Huntington Bank	$7.8 billion
2.	Rocket Mortgage	$6.4 billion
3.	Union Savings Bank	$4.1 billion
4.	Fifth Third Bank	$3.9 billion
5.	Chase	$3.2 billion
6.	U.S. Bank	$3.0 billion
7.	Wells Fargo	$2.4 billion
8.	Third Federal	$2.3 billion
9.	Freedom Mortgage	$2.1 billion
10.	Union Home Mortgage	$2.1 billion

The top mortgage lender in Ohio last year was Huntington Bank, a company founded all the way back in 1866.

In 2021, the Columbus, Ohio-based company funded $7.8 billion in home loans, per HMDA data from Richey May.

That was more than enough to hold off Rocket Mortgage’s $6.4 billion, the nation’s top overall mortgage lender.

In third was Cincinnati, Ohio-based Union Savings Bank with $4.1 billion funded, followed by fellow Cincinnati-based bank Fifth Third with $3.9 billion in loan volume.

Rounding out the top five was JPMorgan Chase with $3.2 billion funded. Chase was the only entry not located in the Midwest.

The rest of the top 10 consisted of U.S. Bank, Wells Fargo, Third Federal Mortgage (Cleveland, OH), Freedom Mortgage, and Union Home Mortgage (Strongsville, OH).

So it seems Ohioans like to keep it local when obtaining a home loan.

Top Ohio Mortgage Lenders (for Home Buyers)

Ranking	Company Name	2021 Loan Volume
1.	Huntington Bank	$2.8 billion
2.	U.S. Bank	$1.6 billion
3.	CrossCountry Mortgage	$1.5 billion
4.	Rocket Mortgage	$1.3 billion
5.	Union Home Mortgage	$1.3 billion
6.	Chase	$1.2 billion
7.	Fairway Independent	$1.2 billion
8.	Fifth Third	$1.1 billion
9.	Wells Fargo	$1.1 billion
10.	Pennymac	$979 million

When it came to home purchase lending, Huntington Bank once again led the charge with $2.8 billion funded.

They were followed by Minneapolis, Minnesota-based U.S. Bank with $1.6 billion and CrossCountry Mortgage (Brecksville, OH) with $1.5 billion funded.

The nation’s top lender, Rocket Mortgage, took fourth with $1.3 billion in purchase loan origination volume, trailed by Union Home Mortgage with a similar $1.3 billion.

Places six through 10 went to Chase, Fairway Independent Mortgage, Fifth Third Bank, Wells Fargo, and Pennymac.

No big surprises here, with more local companies and big household names making the list.

Top Refinance Lenders in Ohio (for Existing Homeowners)

Ranking	Company Name	2021 Loan Volume
1.	Rocket Mortgage	$4.9 billion
2.	Huntington Bank	$4.6 billion
3.	Union Savings Bank	$3.1 billion
4.	Fifth Third Bank	$2.6 billion
5.	Chase	$1.9 billion
6.	Freedom Mortgage	$1.8 billion
7.	PNC Bank	$1.4 billion
8.	Wells Fargo	$1.2 billion
9.	U.S. Bank	$1.2 billion
10.	Third Federal	$1.2 billion

When we shift focus to mortgage refinance loans, Rocket Mortgage is king with $4.9 billion funded.

Per usual, homeowners are happy to look at non-local options as they go for the lowest rate, as opposed to a familiar face.

In second was Huntington Bank with a close $4.6 billion funded, followed by Union Savings Bank with $3.1 billion.

Fifth Third took fourth (confusing) with $2.6 billion in refinance volume, followed by Chase with $1.9 billion.

The remaining companies in the top 10 included Freedom Mortgage, PNC Bank, Wells Fargo, U.S. Bank, and Third Federal.

All in all, more of the same, Ohio-based mortgage companies and big national brands/banks.

Top Mortgage Lenders in Cincinnati

Ranking	Company Name	2021 Loan Volume
1.	Union Savings Bank	$2.0 billion
2.	Huntington Bank	$1.4 billion
3.	Fifth Third Bank	$1.4 billion
4.	Rocket Mortgage	$1.2 billion
5.	Guardian Savings Bank	$1.1 billion
6.	U.S. Bank	$1.1 billion
7.	Guaranteed Rate	$645 million
8.	Wells Fargo	$639 million
9.	Freedom Mortgage	$597 million
10.	PNC Bank	$539 million

Top Mortgage Lenders in Cleveland

Ranking	Company Name	2021 Loan Volume
1.	Rocket Mortgage	$1.6 billion
2.	Huntington Bank	$1.5 billion
3.	Third Federal	$1.1 billion
4.	CrossCountry Mortgage	$1.0 billion
5.	Fifth Third Bank	$780 million
6.	KeyBank	$714 million
7.	First Federal Savings	$569 million
8.	Chase	$566 million
9.	Wells Fargo	$550 million
10.	Citizens Bank	$518 million

Top Mortgage Lenders in Columbus (OH)

Ranking	Company Name	2021 Loan Volume
1.	Huntington Bank	$2.4 billion
2.	Chase	$1.4 billion
3.	Union Savings Bank	$1.4 billion
4.	Rocket Mortgage	$1.3 billion
5.	Fifth Third Bank	$945 million
6.	U.S. Bank	$898 million
7.	Union Home Mortgage	$722 million
8.	Wells Fargo	$637 million
9.	Mr. Cooper	$535 million
10.	Freedom Mortgage	$535 million

Who Are the Best Ohio Mortgage Lenders?

While the Huntington Bank was Ohio’s largest mortgage lender, its reviews are pretty mixed, with a lot of 3-star ratings across different review websites.

It’s difficult to determine if that’s due to mortgage lending or other bank services offered by the company.

Regardless, there are other mortgage companies in Ohio with far superior ratings, even if they aren’t as large.

For example, CrossCountry Mortgage has an excellent 4.97-star rating on Zillow from a staggering 18,000 customer reviews.

Meanwhile, Revolution Mortgage has a 4.96 rating, Lower.com has a 4.92-rating, Union Home Mortgage has a 4.89-rating, and Nations Lending has a 4.81 score.

The highest rated Ohio-based mortgage company on Zillow is a tie between American Mortgage Service Company and Equity Resources, Inc., both with a 4.98 score.

So it’s clear there are plenty of highly-rated Ohio mortgage companies that aren’t necessarily the biggest of the bunch.

At the same time, you may also find that working with a mortgage broker or local credit union is the way to go.

Regardless of what option you choose, do your research and take your time to ensure you obtain quality service at a competitive price.

(photo: tlarrow)

Source: thetruthaboutmortgage.com

Apache is functioning normally

May 29, 2023 by Brett Tams

Today we’re going to talk about the “home equity loan,” which is quickly becoming all the rage with mortgage rates so much higher.

In short, many homeowners have first mortgages with fixed interest rates in the 2-3% range.

Now that a typical 30-year fixed is closer to 6%, these homeowners don’t want to refinance and lose that rate in the process.

But if they still want to access their valuable (and plentiful) home equity, they can do so via a second mortgage.

Two popular options are the home equity line of credit (HELOC) and the home equity loan, the latter of which features a fixed interest rate and the ability to pull out a lump sum of cash from your home.

What Is a Home Equity Loan?

A home equity loan allows you to borrow against the value of your property to access needed cash.

That cash can then be used to pay for things such as home improvements, to pay off other higher-interest loans, fund a down payment for another home purchase, pay for college tuition, and more.

Ultimately, you can use the proceeds for anything you wish. The home equity loan simply allows you to tap into your accrued home equity without selling the underlying property.

Of course, like a first mortgage, you must pay back the loan via monthly payments until it is paid in full, refinanced, or the property sold.

Similarly, you can obtain a home equity loan from a bank, credit union, or direct mortgage lender.

The application process is comparable, in that you must provide income, employment, and asset documentation, but it’s typically faster and less paperwork intensive.

Additionally, your credit report will be pulled to determine your credit scores and overall creditworthiness.

Home Equity Loan Example

Property Value $650,000	First Mortgage	Home Equity Loan	Cash Out Refinance
Interest Rate	3.25%	6.75%	5.75%
Loan Amount	$450,000	$70,000	$520,000
Monthly Payment	$1,958.43	$532.25	$3,034.58
Total Cost		$2,490.68	$3,034.58

Home equity loans are typically second mortgages, taken out by an existing homeowner who already has a first mortgage.

This allows the borrower to access additional funds while maintaining the favorable terms of their first mortgage (and continue to pay it off on schedule).

Imagine a homeowner owns a property valued at $650,000 and has an existing home loan with an outstanding balance of $450,000. Their interest rate is 3.25% on a 30-year fixed.

Obviously they don’t want to lose that low, low rate, so they turn to a home equity product instead.

They would have $200,000 in home equity, though not all of it is necessarily available to tap into.

Most home equity loan lenders will limit how much you can borrow to 80% or 90% of your home’s value.

That means a maximum loan amount of $135,000 if maxed out at 90%.

But we’ll pretend you take out just $70,000, or 80% of your property’s appraised value.

Assuming the loan term is 20 years and the interest rate is 6.75%, you’d have a monthly payment of $532.25.

The loan would amortize like a traditional mortgage, with equal monthly payments until maturity.

Each payment would consist of a principal and interest amount, which would change as the loan was paid off.

You would make this payment each month alongside your first mortgage payment, but would now have an additional $70,000 in your bank account.

When we add the first mortgage payment of $1,958.43 we get a total monthly of $2,490.68, well below a potential cash out refinance monthly of $3,034.58.

Because the existing first mortgage has such a low rate, it makes sense to open a second mortgage with a slightly higher rate.

Do Home Equity Loans Have Fixed Rates?

A true home equity loan should feature a fixed interest rate. In other words, the rate shouldn’t change for the entire loan term.

This differs from a HELOC, which features a variable interest rate that changes whenever the prime rate moves up or down.

To that end, a home equity loan provides safety and stability, similar to a 30-year fixed mortgage.

However, home equity loans have higher interest rates to compensate for that lack of an adjustment.

Simply put, HELOC interest rates will be lower than comparable home equity loan interest rates because they may adjust higher.

You effectively pay a premium for a locked-in interest rate on a home equity loan. How much higher depends on the lender in question and your individual loan attributes.

Home Equity Loan Rates

Similar to mortgage rates, home equity loan rates can and will vary by lender. So it’s imperative to shop around as you would a first mortgage.

Additionally, rates will be strongly dictated by the attributes of your loan. For example, a higher combined loan-to-value (CLTV) coupled with a lower credit score will equate to a higher rate.

Conversely, a borrower with excellent credit (760+ FICO) who only borrows up to 80% or less of their home’s value may qualify for a much lower rate.

Also keep in mind that interest rates will be higher on second homes and investment properties. And maximum CLTVs will likely be lower as well.

All that being said, at the moment home equity loan rates may range from as low as 5% to as high as 12% or more.

As a rule of thumb, you should expect a rate 1-2%+ higher than a comparable 30-year fixed given the increased risk of a second mortgage.

But this spread can shrink or widen depending on market conditions.

Do Home Equity Loans Require a Down Payment?

Now let’s discuss some home equity loan requirements.

While no down payment is required on a home equity loan, since you already own the property, a required amount of home equity is necessary to get approved.

After all, the home equity loan relies upon your property as collateral, and if you don’t have any equity, there’s nothing to lend against.

In other words, you need to have a certain percentage of home equity available to get a home equity loan.

Typically, this is at least 20% of your property’s appraised value to allow for an additional loan against the property.

For example, if you own a home valued at $500,000, you’ll want to have at least $100,000 available.

This would mean an existing first mortgage with a balance of $400,000 or less to allow for more borrowing capacity.

Assuming the home equity loan only allowed for a CLTV of 80%, you’d need even more equity.

For example, a $350,000 existing first mortgage that would allow you to borrow an additional $50,000 via the home equity loan.

Do Home Equity Loans Require an Appraisal?

While it will depend on the company, an appraisal isn’t always required for a home equity loan.

The same is even true of first mortgages these days thanks to advancements in technology.

This may save you some money and make the home equity loan process significantly faster.

However, the bank or lender will still need to determine the value of the property to ensure it is a sound lending decision.

Whether you pay for an appraisal, or are paid a visit by a human appraiser, are entirely different questions.

Either way, understand that the company offering the home equity loan will base the loan amount and APR on some kind of appraised value.

This allows them to determine a LTV or CLTV for which to base pricing adjustments, interest rates, maximum loan amount, and so on.

Do Home Equity Loans Have Closing Costs?

As with the appraisal question, it may depend on the company offering the home equity loan.

Some charge origination fees and other closing costs, while others do not charge any fees.

For example, Discover Home Loans says it doesn’t charge appraisal fees or origination fees.

However, it’s important to look at the big picture, aka the interest rate, to determine what the best deal is.

Similar to a first mortgage, closing costs may not be charged, but the interest rate could be higher as a result.

You would then need to weigh the upfront cost versus monthly interest expense to determine what’s the better deal.

Also note that some lenders may ask that you reimburse them for any waived closing costs if you pay off your home equity loan within 36 months.

This is sort of like a prepayment penalty, though there may be a cap and certain states are exempt.

Just something to keep in mind if you pay off your loan ahead of schedule.

Some home equity loans may have a nominal annual fee, such as $50 per year. And if your loan amount is quite large, title insurance could even be required.

Minimum Credit Score for a Home Equity Loan

Chances are you’ll need at least a 620 FICO score to get approved for a home equity loan these days.

Some lenders may even require a higher credit score, such as a 660 FICO score, in order to get approved.

Also note that your borrowing capacity may be limited by your credit score.

For example, if you have a 620 FICO score, you might only be able to borrow up to 80% of your home’s value.

Meanwhile, a borrower with a 660 FICO might have access to up to 90% of their home’s value.

Additionally, the interest rate will also be dictated by your credit score.

Like a first mortgage, the higher your score, the lower the interest rate. And vice versa.

Do Home Equity Loans Affect Your Credit?

Yes, like a first mortgage, the home equity loan will appear on your credit report.

This includes when the loan was taken out, the outstanding loan balance, and the monthly payment.

Your payment history on the loan will also be tracked over time, which can help or hurt you.

Obviously, if you miss a payment (generally by more than 30 days) it can negatively impact your credit score.

Because it’s a home loan, the impact can be quite severe.

Conversely, if you exhibit a lengthy history of on-time payments, it can bolster your credit scores over time.

How to Get a Home Equity Loan

Similar to a mortgage, many banks and independent mortgage lenders offer home equity loans.

However, they aren’t as readily available as first mortgages, so you’ll need to dig a little deeper.

Simply put, just about all mortgage companies offer 30-year fixed mortgages, but only a handful offer home equity loans.

Chase and Wells Fargo, two of the biggest mortgage lenders out there, don’t offer them at the moment.

That could change as they become more popular, but chances are they’ll be a bit harder to come by.

Additionally, because the terms of home equity loans can vary quite a bit, it’s important to speak to several different companies during your search.

For example, some lenders may only offer home equity loans with loan terms as long as 20 years, or with a minimum credit score of 660. Or their loan amounts might be too small for your needs.

The Rocket Mortgage home equity loan recently launched, but requires a median qualifying FICO score of 680 or higher.

Others come with unique options. The PNC home equity loan allows borrowers to switch between a fixed and variable rate. In that sense, it works as a home equity loan and a HELOC in one loan.

Because this type of product can be a lot more diverse than a standard 30-year fixed, shopping around is probably a good idea.

Rates can also range quite a bit from lender to lender, so put in the time to speak with a local credit union, bank, online lenders, and even mortgage brokers.

Home Equity Loan Advantages

Fixed interest rate
Flexible loan terms (5 – 20 years)
Can borrow large amounts
Little or no closing costs
Fast approvals and fundings
Potential tax write-off
Doesn’t disrupt your first mortgage (e.g. a low rate)

Home Equity Loan Disadvantages

Entire loan amount must be borrowed upfront
You pay interest on the full lump sum
No additional draws permitted
Interest rates higher than HELOCs and first mortgages
Have to manage multiple loans
May have annual fee
Potential early closure fees

Are Home Equity Loans a Good Idea?

As seen in my example above, a home equity loan could be a great idea versus a cash out refinance.

But that assumes you need additional cash and your existing first mortgage features a super low interest rate that is fixed.

This might not always be the case, and it will also depend on the rate you receive on the home equity loan.

Additionally, there might be other options to consider instead of a HEL, such as a HELOC or even a 0% APR credit card.

In the past, I’ve made the argument that a credit card could be used to pay for home renovations.

At the end of the day, a home equity loan is still a loan, and likely an additional loan taken out on top of whatever you’re already paying.

So you need to consider if you really need more cash and if tapping your home equity is the way to go.

Read more: Cash Out vs. HELOC vs. Home Equity Loan

Source: thetruthaboutmortgage.com

Apache is functioning normally

May 29, 2023 by Brett Tams

Today we’ll take a look at the top mortgage lenders in Pennsylvania based on their annual loan volume.

The state of Pennsylvania is unique in that it borders both the Midwest and the Northeast.

This means consumers might gravitate toward a big NYC-based bank or a smaller, independent mortgage lender located closer to say Ohio.

Despite these regional nuances, the nation’s top mortgage lender also grabbed the top spot in The Keystone State.

Read on to see who the other big mortgage players are in Pennsylvania.

Top Mortgage Lenders in Pennsylvania (Overall)

Ranking	Company Name	2021 Loan Volume
1.	Rocket Mortgage	$7.9 billion
2.	Wells Fargo	$7.3 billion
3.	Citizens Bank	$5.0 billion
4.	Allied Mortgage Group	$4.1 billion
5.	Pennymac	$3.2 billion
6.	CrossCountry Mortgage	$3.0 billion
7.	AmeriHome Mortgage	$3.0 billion
8.	PNC Bank	$2.9 billion
9.	Newrez	$2.9 billion
10.	Freedom Mortgage	$2.6 billion

You guessed it. The top mortgage lender in Pennsylvania was none other than Rocket Mortgage, which incidentally is also the nation’s #1 lender.

The Detroit-based company originated $7.9 billion in home loans last year, per HMDA data from Richey May.

That was enough to beat out second place Wells Fargo, which came close with $7.3 billion funded during the year.

In third place was Providence, Rhode Island-based Citizens Bank with $5 billion in home loan volume.

Allied Mortgage Group grabbed fourth with $3.2 billion, while big correspondent lender Pennymac took fifth with $3 billion.

Others in the top 10 included CrossCountry Mortgage, AmeriHome Mortgage, PNC Bank, Newrez, and Freedom Mortgage.

Three of the companies are actually based in Pennsylvania, including Allied Mortgage Group (Bala Cynwyd), PNC Bank (Pittsburgh), and Newrez (Fort Washington).

Top Pennsylvania Mortgage Lenders (for Home Buyers)

Ranking	Company Name	2021 Loan Volume
1.	Wells Fargo	$3.0 billion
2.	Allied Mortgage	$2.4 billion
3.	CrossCountry Mortgage	$2.0 billion
4.	Citizens Bank	$1.8 billion
5.	AmeriHome Mortgage	$1.6 billion
6.	Pennymac	$1.6 billion
7.	Rocket Mortgage	$1.5 billion
8.	Guaranteed Rate	$1.4 billion
9.	Prosperity Home	$1.2 billion
10.	Chase	$1.1 billion

If we focus solely on home purchase loans, Wells Fargo topped the list with $3 billion funded in the state of Pennsylvania.

They were followed by Allied Mortgage Group with $2.4 billion and Ohio-based CrossCountry Mortgage with $2 billion.

It makes sense that both those companies did so well as home buyers tend to turn to local lenders when it involves a home purchase.

Citizens Bank took fourth with $1.8 billion, while AmeriHome came in a close fifth with $1.6 billion.

The rest of the top 10 included Pennymac, Rocket Mortgage, Guaranteed Rate, Prosperity Home Mortgage, and Chase.

Top Pennsylvania Refinance Lenders (for Existing Homeowners)

Ranking	Company Name	2021 Loan Volume
1.	Rocket Mortgage	$6.2 billion
2.	Wells Fargo	$4.0 billion
3.	Citizens Bank	$2.8 billion
4.	Freedom Mortgage	$2.1 billion
5.	PNC Bank	$2.1 billion
6.	loanDepot	$1.8 billion
7.	Newrez	$1.8 billion
8.	Allied Mortgage	$1.7 billion
9.	Pennymac	$1.6 billion
10.	Mr. Cooper	$1.6 billion

If we filter the list to only include mortgage refinances, Rocket Mortgage was the top dog with $6.2 billion funded.

That was more than enough to beat out second place Wells Fargo’s $4 billion, and Citizen Bank’s $2.8 billion.

In fourth was Freedom Mortgage with $2.1 billion, followed by Pennsylvania’s own PNC Bank with a similar amount.

loanDepot, Newrez, Allied Mortgage Group, Pennymac, and Mr. Cooper rounded out the top 10.

So no major surprises here as existing homeowners often use big banks and household name-lenders when seeking a refinance.

Top Mortgage Lenders in Philadelphia

Ranking	Company Name	2021 Loan Volume
1.	Allied Mortgage	$1.3 billion
2.	Wells Fargo	$1.2 billion
3.	Rocket Mortgage	$1.0 billion
4.	CrossCountry Mortgage	$823 million
5.	Guaranteed Rate	$798 million
6.	New York Community Bank	$750 million
7.	Citizens Bank	$744 million
8.	Chase	$608 million
9.	AmeriHome Mortgage	$579 million
10.	loanDepot	$557 million

Top Mortgage Lenders in Pittsburgh

Ranking	Company Name	2021 Loan Volume
1.	Citizens Bank	$1.4 billion
2.	PNC Bank	$1.3 billion
3.	Rocket Mortgage	$1.2 billion
4.	Wells Fargo	$1.0 billion
5.	Dollar Bank	$942 million
6.	First National Bank	$686 million
7.	First Commonwealth	$493 million
8.	AmeriHome Mortgage	$481 million
9.	Pennymac	$413 million
10.	Affordable Mortgage Advisors	$408 million

The Best Pennsylvania Mortgage Lenders May or May Not Be Listed Above

It’s important to differentiate top and best, as one refers to size and the other customer satisfaction.

At the same time, the two terms can apply to one company, assuming it is both large and loved by its clients.

If we use the J.D. Power satisfaction survey as a barometer, Rocket was second on that list in 2021 (only beaten by Guild Mortgage), while Wells Fargo and Citizens were below the industry average.

Meanwhile, PNC was merely average, Pennymac below average, and Newrez was at the bottom of the list in terms of satisfaction.

Conversely, CrossCountry Mortgage ranked near the top just behind Rocket, and loanDepot also had solid marks.

In other words, company size and high ratings don’t always go hand-in-hand, so you need to put in the time to research.

Remember, you’re not buying a washing machine, you’re getting a mortgage that could stay with you for 30 years.

Take the time to read company reviews, check out third-party ratings websites, and ask for referrals from friends and family.

As I always say, you might find a small, local credit union or mortgage broker that is a better fit than a giant lender. Or you might want to go with a household name.

Either way, gather a few quotes and speak to a handful of different companies so you can get a better feel for what’s out there.

(photo: Doug Kerr)

Source: thetruthaboutmortgage.com

Apache is functioning normally

May 29, 2023 by Brett Tams

With the housing market so competitive, and properties often going above asking, getting a mortgage can be a little more stressful.

One major component of the mortgage approval process is determining the collateral value of the subject property, otherwise known as the appraised value.

A bank or lender generally won’t approve you for a home loan without getting an independent appraisal first, at your expense.

Simply put, they want to know that the property you’re buying or refinancing is actually worth what you or the seller think it’s worth.

Even if you’re a stellar borrower with an excellent credit score and tons of money in the bank, a valuation issue can sink your loan approval.

While this typically isn’t a problem, it can muddy the waters if the appraisal happens to come in low.

The good news is we’re in a rising real estate market, with home prices experiencing their best annual gains in decades. They’re also at new record highs.

This means even a bid over asking could easily come in at value when the appraisal is conducted.

But what if it doesn’t? Often, the home buyer would need to make some adjustments to their financing to “make it work.”

The most common tactic is to put more money down to keep the loan-to-value (LTV) ratio at its original level.

Unfortunately, this isn’t always an option if a buyer is light on cash, and home sellers (or at least their listing agents) know this.

This is why they favor cash buyers over those who need a home loan to get the job done, and may balk if you request an appraisal contingency.

Introducing the Better Appraisal Guarantee

Keep all your locked-in loan terms (interest rate, APR, cash to close, etc.) regardless of the appraised value
Must be a conforming purchase loan on a primary residence with a loan amount below $822,375 and a minimum 10% down payment
Buyer must use a Better Real Estate agent or partner agent and get their mortgage from Better
May also qualify for up to 1% of the purchase price in lender credits to offset closing costs

To level the playing field somewhat, Better Mortgage has launched their “Better Appraisal Guarantee.”

In short, they’ll honor the monthly payment, mortgage rate, APR, and cash to close reflected on your valid locked Loan Estimate (LE), regardless of what happens with your appraisal.

For example, if you offer $600,000 for a house and put down 10%, and the value comes back at $550,000, Better Mortgage will still honor your locked mortgage rate and all the details behind it.

In this scenario, the LTV would actually rise from 90% to about 98%, which would generally require you to bring in more money at closing.

If you didn’t, either the loan wouldn’t get approved or at minimum you’d now need to pay private mortgage insurance (PMI) and the mortgage rate would theoretically be higher to compensate for greater risk.

Aside from these buy-side advantages, the seller would also benefit because you wouldn’t need to retool your mortgage. And as such, could close without delay and no concessions on their end.

In a sense, this would align it somewhat with the certainty of a cash offer (minus the rest of the mortgage loan process), which could also give you an edge in a bidding war.

This is similar to other products out there like HomeLight Cash Offer and BoardRE (now known as Accept.inc).

The caveat is that this new feature is for Better Mortgage customers who also use a Better Real Estate Agent or a Better Real Estate Partner Agent.

Like other companies, Better is trying to control more of the home buying process than just the mortgage piece via their “Better Real Estate” division.

To sweeten the deal, Better is also offering up to 1% of the home sales price in lender credits if you use Better Mortgage and a Better real estate agent.

In order to qualify, it has to be a conforming purchase loan with an amount less than $822,375, with a down payment of at least 10% on a primary residence.

To sum things up, if you don’t already have a real estate agent and like Better as a mortgage lender, this could be a pretty exceptional value-add.

Of course, always put in the time to shop around with other lenders and real estate agents to ensure it’s the right fit.

Read more: Get Up to $6,000 in Amex Statement Credits If You Use Better Mortgage

Source: thetruthaboutmortgage.com

Apache is functioning normally

May 28, 2023 by Brett Tams

Back in July, the NCAA granted college athletes the opportunity to make money by using their “name, image and likeness” (NIL).

This means getting paid to sign autographs, make appearances, or promote products and services, among other things.

Importantly, it keeps college sports from turning into pay-for-play schemes, while also providing clarity to student-athletes and their families.

These NIL opportunities are beginning to materialize, and we now have what appears to be the first mortgage-related deal.

The nation’s second largest mortgage lender, United Wholesale Mortgage, is offering $500 per month to Michigan State University (MSU) athletes.

Because UWM is a wholesale mortgage lender, these athletes will essentially be promoting the mortgage broker model.

MSU Athletes Can Earn $500 Per Month for the 2021-2022 Season

This new partnership involves MSU men’s basketball and football players, of which there are 133 in total.

Each one will have the opportunity to earn $500 per month for the 2021-2022 season, which will amount to $6,000 per player.

In terms of how they’ll market UWM, it’ll apparently be via social media channels as opposed to a clothing partnership.

Per Crain’s Detroit Business, the MSU players won’t “be required to wear UWM logos on their jerseys.”

This differs from UWM’s earlier deal with the Detroit Pistons, in which their logo will feature on the left front strap of official team jerseys for the 2021-22 NBA season.

So expect all your favorite MSU student-athletes to pitch mortgage brokers and specifically UWM on Instagram and other social media platforms.

Rocket Mortgage Is the Official Mortgage Provider of MSU Athletics

What makes this story a little more interesting is the fact that UWM isn’t even the “official mortgage provider” of MSU.

That title goes to crosstown rival Rocket Mortgage, which recently inked a new five-year deal to be the presenting sponsor of the men’s basketball team.

If you visit the Breslin Center for a hoops game, you’ll see signage that reads “MSU Spartans Presented by Rocket Mortgage.”

There will also be “considerable branding” throughout the Breslin Center and Spartan Stadium for Rocket Mortgage.

Notably, the Rocket Mortgage logo will be “prominently displayed” on MSU football coach Mel Tucker’s headset, along with the MSU men’s and women’s basketball team benches and clipboards.

So while the players may be pitching UWM, they’ll have to compete with the massive Rocket brand campaign at the same time.

Rocket Mortgage and UWM Founders Are Both Michigan State Alum

As to why MSU appears to be the crown jewel to both the #1 and #2 mortgage company in the United States, it has a little to do with history.

It just so happens to be the alma mater of Rocket Mortgage founder Dan Gilbert, along with current UWM president and CEO Mat Ishbia.

Ishbia is actually the founder’s son, and joined UWM as its 12th team member after briefly coaching the MSU basketball team alongside Tom Izzo.

Before that, Ishbia also won a national championship with the Spartans basketball team back in 2000.

Both Rocket Mortgage and UWM have also been very active in metro Detroit and nearby, contributing to revitalization efforts in the state.

So it appears this is a sort of battle between the companies, which constantly exchange jabs in somewhat subtle, yet not so subtle ways.

This latest exchange makes MSU the venue for a proxy war between retail mortgage lending and wholesale lending, the latter fueled by mortgage brokers.

For the record, Rocket Mortgage also announced that through new and expanded multi-year deals, it now has partnerships with 25 of the “most influential and prestigious athletic programs” in the nation.

That list includes four Historically Black Colleges and Universities (HBCUs): Grambling State, Howard, Jackson State, and Southern University.

Perhaps the Rocket/UWM rivalry is better than college sports…

Source: thetruthaboutmortgage.com

Apache is functioning normally

May 28, 2023 by Brett Tams

If you’re a senior, you might be wondering who the top reverse mortgage lenders in the nation are.

Unlike the traditional home loan market, the reverse mortgage industry is dominated by a small handful of companies.

Typically, these lenders specialize in reverse mortgage lending, as opposed to simply offering the loans alongside other options.

As a quick refresher, a reverse mortgage loan allows homeowners 62 and older (55 in some cases) to access cash in their property without monthly payments.

In 2021, reverse lenders originated 59,000 loans, a 36% increase from the 43,000 the year prior. Read on to see who made the top-10 list last year.

Top Reverse Mortgage Lenders

Ranking	Company Name	2021 Loan Count
1.	AAG	18,407 (31.3% share)
2.	FOA Reverse	10,575 (18% share)
3.	Reverse Mortgage Funding	6,177 (10.5% share)
4.	PHH Mortgage	4,319 (7.3% share)
5.	Mutual of Omaha	4,101 (7% share)
6.	Longbridge Financial	3,636 (6.2% share)
7.	Cornerstone First	3,296 (5.6% share)
8.	Open Mortgage	2,444 (4.2% share)
9.	HighTechLending	1,144 (1.9% share)
10.	Nationwide Equities	705 (1.2% share)

Last year, the top reverse mortgage lender in the country was American Advisors Group, or AAG for short.

The company originated more than 18,000 reverse mortgages in 2021, per HMDA data from the Consumer Financial Protection Bureau (CFPB).

While that might not sound like a lot of loans, it represented a staggering 31.3% market share.

So one company grabbed nearly a third of the entire reverse mortgage market. And yes, actor Tom Selleck of Magnum P.I. fame has been their spokesperson for a while now.

For perspective, the nation’s #1 mortgage lender (for forward mortgages), Rocket Mortgage, held an 8.8% market share in 2021.

AAG was also number one in 2020 with a slightly higher 35% market share.

In second place was Finance of America Reverse, the reverse mortgage division of FOA.

The company funded more than 10,500 reverse mortgages during the year, giving them an also impressive 18% market share. They ranked second in 2020 also with a 20.2% share.

Coming in third was Reverse Mortgage Funding LLC, which originated more than 6,000 loans for a 10.5% market share. They were third a year earlier as well with a very similar share.

In fourth was PHH Mortgage, which also offers forward mortgages to customers. The company managed to originate more than 4,300 reverse loans for a 7.3% market share.

Rounding out the top five was Mutual of Omaha Mortgage with about 4,100 loans funded for a 7% share of the market.

Collectively, the top five reverse mortgage lenders held about 75% of the overall market.

In sixth was Longbridge Financial with 3,600 loans funded and a 6.2% market share.

Seventh place went to Cornerstone First Financial with nearly 3,300 reverse loans funded for a 5.6% market share.

Behind them was Open Mortgage with nearly 2,500 reverse mortgages originated for a 4.2% share of the market.

HighTechLending Inc. (dba American Senior) took ninth with about 1,150 loans funded and a 1.9% market share, followed by Nationwide Equities Corp. with 705 loans and a 1.2% share.

Altogether, the top 10 reverse mortgage lenders held about a 93% share of the overall market.

Who Are the Top Rated Reverse Mortgage Companies?

We know who the biggest reverse mortgage lenders in the country are, but what about best?

That’s a different story, and one that can be difficult to quantify due to the many ratings websites out there.

However, I did some digging to find a good sample size of reviews for each company listed to see what customers think of them. We’ll also check out their Better Business Bureau (BBB) rating.

Starting with AAG, they have an “excellent” 4.5/5 score on Trustpilot from nearly 5,000 customer reviews. Their BBB rating is currently a ‘B+.’

Finance of America Reverse has a “great” 4/5 score on Trustpilot from about 500 reviews and an ‘A+’ BBB rating.

Reverse Mortgage Funding LLC has an excellent 4.6/5 score on Trustpilot from nearly 600 reviews and an ‘A+’ BBB rating.

PHH Mortgage has a 3.9/5 on Consumer Affairs from about 600 reviews and a ‘B+’ BBB rating. Other review sites didn’t have a large enough sample size.

Mutual of Omaha Reverse has a 3.9/5 score on Trustpilot from over 100 reviews and an ‘A+’ BBB rating.

Longbridge Financial has a 4.8/5 score on Trustpilot from nearly 800 reviews and an ‘A+’ BBB rating.

Cornerstone First Financial has a 4.9 rating from about 250 Google reviews and an ‘A+’ BBB rating.

Open Mortgage has a 4.91/5 on Zillow from about 25 reviews (most I could find) and an ‘A+’ BBB rating.

HighTechLending Inc. (dba American Senior) has a 4.95/5 on Zillow from about 110 reviews and an ‘A+’ BBB rating.

Lastly, Nationwide Equities Corp. has a 4.98/5 on Zillow from roughly 110 reviews and an ‘A’ BBB rating.

Remember to look beyond just the top names and also consider mortgage brokers, local credit unions, and more for in your search for a reverse mortgage.

Source: thetruthaboutmortgage.com

Apache is functioning normally

May 28, 2023 by Brett Tams

Purchase mortgage rates continue their roller coaster ride – they moved above 5% this week, according to the latest purchase mortgage survey from Freddie Mac.

The 30-year fixed-rate mortgage increased this week to average 5.22%, up from last week’s 4.99%. A year ago this time, rates averaged 2.77%. The index compiles rates reported by lenders during the past three days.

“The 30-year fixed-rate went back up to well over 5% this week, a reminder that recent volatility remains persistent,” Sam Khater, chief economist at Freddie Mac, said in a statement.

Mortgage rates tend to align with the 10-year U.S Treasury yield, which increased five basis points in one week to 2.78% Wednesday.

The volatility in rates reflects the Federal Reserve actions to control persistent inflation. The Fed raised interest rates by 75 bps in its July’s meeting, marking its fourth rate hike this year.

So far, the tightening monetary policy brought a technical recession, as the gross domestic product fell by 0.9% in the second quarter, marking the second consecutive decline. (The Biden administration has refused the country is in a recession, citing a strong labor market.)

Creating a path to success in today’s purchase market

Meeting the needs of a new generation of homebuyers while managing the ebbs and flows of a volatile housing market is a major endeavor for any mortgage lender. So, what should lenders be doing to thrive in the face of a post-pandemic housing market rife with new hurdles?

Presented by: Calyx

In addition, year over year, the Consumer Price Index (CPI) for all items rose 8.5% in July, down from the 9.1% yearly increase reported a month ago. Inflation did not increase from June to July.

“Although rates continue to fluctuate, recent data suggest that the housing market is stabilizing as it transitions from the surge of activity during the pandemic to a more balanced market,” Khater said.

He added: “Declines in purchase demand continue to diminish while supply remains fairly tight across most markets. The consequence is that house prices likely will continue to rise, but at a slower pace for the rest of the summer.”

Regarding borrowers demand for mortgage loans, according to the Mortgage Bankers Association (MBA), the market composite index, a measure of mortgage loan application volume, increased 0.2% for the week ending Aug. 5.

The refinance index rose 4% from the previous week, and the purchase index was down 1%.

Loan officers told HousingWire that, amid volatility, they had seen an uptick in cash-out refis. There is a general concern with the trajectory of the economy, and borrowers worry their home may go down in value as the market cools – in this case, they would have less equity to access.

On HousingWire’s Mortgage Rates Center, Black Knight’s Optimal Blue OBMMI pricing engine measured the 30-year conforming mortgage rate at 5.351% Wednesday, down from 5.448% the previous week. Meanwhile, the 30-year fixed-rate jumbo was at 5.261% Wednesday, down from 5.472% the week prior, according to the Black Knight index.

According to Freddie Mac, the 15-year fixed-rate purchase mortgage averaged 4.59% with an average of 0.7 point, up from last week’s 4.26%. The 15-year fixed-rate mortgage averaged 2.15% a year ago. The 5-year ARM averaged 4.43% this week, up from 4.25% the previous week. The product averaged 2.44% a year ago.

Source: housingwire.com

Apache is functioning normally

May 27, 2023 by Brett Tams

A less-than-stellar credit score doesn’t automatically disqualify you from refinancing your mortgage. Fortunately, there are several options to refinance your mortgage with a bad credit score.

Here’s what you need to know about lender credit standards and the steps you can take to refinance with a lower credit score.

What Credit Score Is Needed to Refinance?

Every lender has a different set of criteria for credit scores and refinancing. To refinance a conventional mortgage, most lenders look for a credit score of at least 620.

Some government programs may require a credit score of at least 580 and some may have no minimum at all.

For example, most Federal Housing Administration (FHA) loans require a credit score of at least 580. The Department of Veterans Affairs (VA) doesn’t set a minimum credit score.

As a general rule of thumb, the higher your credit score, the more likely you are to qualify for a mortgage refinance.

However, your credit score isn’t the only determining factor. If you have a higher debt-to-income (DTI) ratio and loan-to-value (LTV) ratio and minimal cash on hand, the credit score requirement may increase.

How to Refinance a Mortgage with a Bad Credit Score

It may be possible to refinance your mortgage with a bad credit score, without needing to improve your credit profile first. You should explore all of your refinancing options to find the one that makes the most sense for your situation.

1. Chat with Your Existing Mortgage Lender

Talk with your lender about your refinance options with a bad credit score. If you’ve made timely mortgage payments, your lender may be able to work with you even with a bad credit score.

Your lender could offer you a portfolio refinance, which is originated and kept by the lender rather than being sold on the secondary market. Because of this, portfolio refinance loans oftentimes have relaxed qualification standards.

It’s still a good idea to speak with multiple lenders, apply and compare quotes, even if your current mortgage lender says you’re eligible to refinance.

2. Use a Cosigner

Another option is to use a friend or family member as a cosigner on your mortgage refinance loan. Your cosigner must be at least 18 years old, have a valid Social Security number, and meet all minimum requirements for the loan.

Keep in mind that the cosigner is taking a major risk and is legally responsible for your debt if you stop making payments. This could also hurt your cosigner’s credit score.

3. FHA Refinance Programs

The FHA offers several refinance options for homeowners with bad credit. An FHA loan is a mortgage that is backed by the U.S. government and issued by a bank or other approved lender.

Here are some options:

FHA rate-and-term refinance: The FHA rate-and-term refinance requires a credit check and a minimum credit score between 500 and 580, depending on your LTV ratio. You also need to prove that you’ve made 12 consecutive monthly mortgage payments on time.
FHA streamline refinance: An FHA streamline refinance has two options: credit qualifying and non-credit qualifying. A non-credit qualifying streamline refinance doesn’t have a minimum credit score but you may pay a higher interest rate. With a credit qualifying streamline refinance, the lender will run a credit check and verify your DTI ratio.
FHA cash-out refinance: You can borrow up to 80% of your home’s value with a credit score as low as 500, but some lenders may require a higher score.
FHA 203(k) refinance: This is a type of refinancing that enables homeowners to combine renovation expenses into the total amount of the new mortgage. The FHA accepts credit scores as low as 580, although some lenders might require a score of 620 or higher to qualify for a 203(k) refinance loan.

4. VA Refinance

Servicemembers, veterans, or qualifying spouses may qualify for a VA loan backed by the federal government and issued by private lenders. The VA has no minimum credit score requirement, but the lender may require a credit score of 620 or higher.

There are two VA refinance options:

VA streamline refinance: If you’re eligible, you can refinance with bad credit with an Interest Rate Reduction Refinance Loan (IRRRL). The IRRRL must be used to refinance your existing VA-backed home loan and while the VA doesn’t require a new credit check, the lender may be different.
VA cash-out refinance: You can use the VA cash-out refinance to tap your home’s equity, but you must meet the VA’s — and the lender’s — credit and income requirements.

5. USDA Streamlined Assist Refinance

The USDA’s Streamlined Assist program gives current USDA direct and guaranteed home loan borrowers with low or no equity the ability to refinance for a lower interest rate and lower monthly payments. No credit review is required, but you must have made at least 12 consecutive mortgage payments and meet income eligibility standards.

How to Improve Your Credit Score to Refinance a Mortgage

There are several things you can do to improve your credit score before refinancing your mortgage.

Raising your credit score by just 20 points can potentially lower your monthly mortgage payments and save you thousands on interest.

Here are a few options:

Check your credit report: You can check your credit report for free once per year with the three major credit bureaus — Experian, Equifax, and TransUnion — to see what’s keeping your credit score so low. You can also check for errors, unauthorized charges, and fraud, which could be lowering your credit score. If you find any issues, you can dispute them with the credit bureau.

Pay down debt: Your DTI is another factor that lenders will consider. Try to keep your DTI under 43%.
Make payments on time: Your credit score is heavily influenced by your payment history. A single missed payment can significantly lower your credit score. Payment history accounts for 35% of your FICO credit score.
Save money: Build your savings to make a larger down payment or keep the extra cash reserves to potentially lower your level of risk to lenders.

Explore Your Refinance Options with Total Mortgage

Even if you have a low credit score, this doesn’t mean that you are disqualified from refinancing your loan. Consult with a Total Mortgage advisor to explore all your mortgage refinance options.

Find an expert near you or apply for a refinance loan online!

Source: totalmortgage.com

Apache is functioning normally

May 27, 2023 by Brett Tams

Let’s check out the top mortgage lenders in Minnesota based on the most recent year’s loan volume.

Around 750 mortgage companies originated roughly $91 billion in home loans in The North Star State last year.

But only one company bested the rest – and they’re actually headquartered in Minnesota!

Yes, I’m referring to U.S. Bank, which is located in Minneapolis, MN.

Read on to see which other mortgage lenders were active in the Land of 10,000 Lakes.

Top Mortgage Lenders in Minnesota (Overall)

Ranking	Company Name	2021 Loan Volume
1.	U.S. Bank	$6.4 billion
2.	Wells Fargo	$4.8 billion
3.	Bell Bank	$4.4 billion
4.	Rocket Mortgage	$3.9 billion
5.	UWM	$2.7 billion
6.	Summit Mortgage	$2.6 billion
7.	Pennymac	$2.2 billion
8.	CrossCountry Mortgage	$2.1 billion
9.	Chase	$1.7 billion
10.	loanDepot	$1.6 billion

As mentioned, U.S. Bank took the top spot in its home state with $6.4 billion in home loans funded during 2021, per HMDA data from Richey May.

That was more than enough to beat out its closest rival, Wells Fargo, which originated $4.8 billion in the state.

A third bank, Bell Bank, out of nearby Fargo, North Dakota, took third place with $4.4 billion in home loan volume.

It’s rare these days to see a depository bank lead in the mortgage world, and even more uncommon to see the top three all big banks.

Nowadays, it is nonbanks like Rocket Mortgage that tend to be the biggest players in the industry.

Speaking of, Rocket took fourth with $3.9 billion funded, followed by its rival United Wholesale Mortgage (UWM) with $2.7 billion in loan origination volume.

The rest of the top 10 included Summit Mortgage, Pennymac, CrossCountry Mortgage, Chase, and loanDepot.

Just two of the ten companies listed above are headquartered in Minnesota; U.S. Bank and Summit Mortgage, though Wells Fargo has a big presence in the state.

And many of the other companies are in the region, whether it’s Ohio, Michigan, or South Dakota.

Top Minnesota Mortgage Lenders (for Home Buyers)

Ranking	Company Name	2021 Loan Volume
1.	U.S. Bank	$3.0 billion
2.	Bell Bank	$2.4 billion
3.	Summit Mortgage	$1.6 billion
4.	Wells Fargo	$1.5 billion
5.	CrossCountry Mortgage	$1.3 billion
6.	UWM	$1.1 billion
7.	Pennymac	$897 million
8.	Prosperity Home	$862 million
9.	Alerus Financial	$788 million
10.	Fairway Independent	$782 million

If the top lenders are filtered to include home purchase loans only, the list doesn’t change too much.

Once again, U.S. Bank led the list with $3 billion funded, followed by Bell Bank with $2.4 billion, and Summit Mortgage with $1.6 billion.

In fourth was Wells Fargo with $1.5 billion and CrossCountry Mortgage took fifth with $1.3 billion.

Pontiac, Michigan-based UWM took sixth with $1.1 billion funded, pretty decent given they only work with mortgage brokers.

In seventh was SoCal-based Pennymac with $897 million, a big correspondent mortgage lender that lets smaller companies resell its products.

They were followed by Prosperity Home Mortgage, Alerus Financial (another ND company), and Fairway Independent Mortgage out of Wisconsin.

Overall, no major surprises and a good chunk of local companies from Minnesota or nearby states.

Top Refinance Lenders in Minnesota (for Existing Homeowners)

Ranking	Company Name	2021 Loan Volume
1.	Rocket Mortgage	$3.3 billion
2.	Wells Fargo	$3.2 billion
3.	U.S. Bank	$3.0 billion
4.	Bell Bank	$1.9 billion
5.	UWM	$1.6 billion
6.	Freedom Mortgage	$1.3 billion
7.	Pennymac	$1.3 billion
8.	loanDepot	$1.2 billion
9.	Chase	$1.1 billion
10.	Mr. Cooper	$953 million

When it came to mortgage refinances, Rocket Mortgage outdid the rest with $3.3 billion funded in Minnesota.

Not a surprise as they are the top mortgage lender in the U.S. and refis often aren’t dominated by local companies like purchase loans can be.

In second was Wells Fargo with a very close $3.2 billion, impressive given their multiple mortgage controversies over recent years.

U.S. Bank also wasn’t far off with $3.0 billion funded, making the top three pretty closely contested.

Bell Bank took fourth with a respectable $1.9 billion, followed by UWM with $1.6 billion funded.

Places six through 10 went to Freedom Mortgage, Pennymac, loanDepot, Chase, and Mr. Cooper.

Actually quite a few local companies in the mix, which often isn’t the case with refis.

Top Mortgage Lenders in Minneapolis-St. Paul

Ranking	Company Name	2021 Loan Volume
1.	U.S. Bank	$5.1 billion
2.	Wells Fargo	$3.9 billion
3.	Bell Bank	$3.8 billion
4.	Rocket Mortgage	$3.1 billion
5.	Summit Mortgage	$2.4 billion
6.	UWM	$2.0 billion
7.	CrossCountry Mortgage	$1.9 billion
8.	Pennymac	$1.8 billion
9.	Chase	$1.7 billion
10.	Alerus Financial	$1.5 billion

Are the Best Minnesota Mortgage Lenders Also the Biggest?

We know U.S. Bank is the top mortgage lender in Minnesota. And they’re also top rated, with a 4.98/5 rating on Zillow from about 11,000 reviews.

That’s pretty impressive as it is near perfection, and since the reviews come from Zillow, we know they are related to their home loans division, as opposed to other banking activity.

Despite its issues, Wells Fargo also scored well on Zillow too, with a 4.95/5 rating from over 4,000 reviews.

I couldn’t find a ton of reviews for Bell Bank, but they did have a 4.1/5 from about 50 Google reviews, and a 4.5/5 on WalletHub from about 250 reviews.

Local lender Summit Mortgage also has top marks on Zillow, with a 4.98/5 from about 1,500 reviews.

One lender not on the lists above is Bloomington-based AMEC Home Loans, which has a similarly solid 4.96/5 from over 2,200 customer reviews.

There’s also TruStone Financial Credit Union, which has a 4.98/5 from about 800 reviews.

And there are countless mortgage brokers, local credit unions, and independent lenders that could be a good fit as well.

At the end of day, biggest isn’t always best, so put in the time to research mortgage companies of all sizes to find the right fit.

(photo: Doug Kerr)

Source: thetruthaboutmortgage.com

Apache is functioning normally

May 27, 2023 by Brett Tams

If you fall behind on several mortgage payments, your lender may begin the foreclosure process, which can lead to months of financial and emotional stress, and even result in the loss of your home.

Key Takeaways

Foreclosures occur when a lender takes control over a property from a borrower for failing to make payments
Foreclosures may occur by court order or not, depending on the state the home is located in
There are several indicators that come before the foreclosure, including notice of default
Foreclosures take 2.5 years to complete on average, but can take up to seven years
Foreclosures can damage your credit score and result in loss of property

What is a foreclosure?

Foreclosure definition

A foreclosure is when a lender takes control of a property after the borrower misses several mortgage payments.

When you purchased your home and took out a mortgage, you agreed to a deal with your bank or lender. They gave you the financing upfront to pay for the home, and in return, you signed a contract agreeing to pay a specific amount each month for a set number of years.

If you start falling behind on your payments, or stop making your mortgage payments completely, the bank or lender can foreclose on the property and sell it as a way to make back the funds that were lost.

When you purchased your home, you signed a mortgage contract that specified the amount of money you borrowed, as well as the interest rate and the details about your monthly payment.

However, simply living in your home does not mean that you legally own it. If you have a mortgage, the bank or lender technically owns the property until you make your final mortgage payment.

Types of foreclosure

After you have several missed mortgage payments, your lender can start the foreclosure process. There are two main ways your home can be foreclosed on:

A judicial foreclosure, meaning the lender needs to get a court order.
A nonjudicial foreclosure, depending on the state where the property is located.

There are several different types of foreclosures, depending on the state and the terms of your mortgage. Some foreclosures involve legal action and others do not. The types of foreclosures include:

Judicial foreclosure: With a judicial foreclosure, the lender files a lawsuit and the borrower is notified of the non-payment. The homeowner has 30 days to make up the missed payments, otherwise the foreclosure process will proceed.
Power of sale: A power of sale foreclosure is allowed in some states if your mortgage has a power of sale clause in the contract. Once the borrower falls behind on their payments, their mortgage provider is allowed to put the house up for auction. A power of sale foreclosure is considered a non-judicial foreclosure because there is no legal action taken.
Strict foreclosure: Strict foreclosures are less common because they are only allowed in a few states. In this case, the mortgage lender files a lawsuit against the homeowner, and if the borrower does not make up their payments within the court-ordered time period, the home can be seized by the mortgage holder.

The foreclosure process in 5 steps

From the time of your first missed mortgage payment to the foreclosure sale of your home, there are several steps in the foreclosure process. These phases can vary by state, but generally follow this timeline. Each state has its own laws pertaining to the process of foreclosure and foreclosure sales. These can govern the borrower’s relief options if already in foreclosure, how to go about posting a Notice of Sale, the sale timeline and other parts of the process.

Step 1: Missed mortgage payments

If your mortgage payment is a few days late, you are probably not at risk of foreclosure. Your lender may have a grace period of up to two weeks for you to make your payment without serious penalties. After the grace period, however, your payment is considered late and you’ll be charged late fees. You might also receive a warning from your lender about a potential foreclosure if you fail to make the payments.

Step 2: Notice of Default

After three to six months of missed mortgage payments, your lender will file a Notice of Default with the local recorder’s office. Your lender will also send one to you via certified mail, and depending on your state, might post the notice on your front door. This notice specifies how much you owe in order to bring your mortgage back into good standing.

A Notice of Default could show up on your credit report and affect your score. This can make it more challenging to obtain other types of credit or refinance your mortgage.

A Notice of Default doesn’t equate to the lender immediately or automatically foreclosing on your home, and it doesn’t mean you don’t have options to prevent the foreclosure from happening. You can put a stop to the proceedings by getting current on your payments.

Step 3: Preforeclosure

Preforeclosure is the time period between the Notice of Default and the auction or sale of your home. During this time, if you can get your hands on the amount specified in the Notice of Default, you’ll be able to stop the foreclosure process from going any further. The exact amount of time you have depends on your state. During preforeclosure, you might also have the option to sell your home and pay back the money owed, in what is called a short sale.

Step 4: Notice of Sale

If you don’t have the money to bring your mortgage into good standing within the allotted time frame, your lender will file a Notice of Sale, and your home will be placed up for auction at a specified time and location.

How the Notice of Sale is published depends on your state. For example, in North Carolina, the notice must be published in a local newspaper and posted on the door of the local courthouse, while in California, it must be posted on the property as well as a public place in the county.

Because the Notice of Sale is public information and has been advertised, several buyers, including investors, might be interested in buying your home. Depending on laws in your state, you might have the ability to exercise right of redemption (meaning you can reclaim your home) up until the foreclosure sale, or even after.

Step 5: Eviction

Following the auction and sale of your home, you’ll generally have a few days to gather your belongings and move to a new residence. If you do not voluntarily move out, law enforcement personnel are legally allowed to remove you and your belongings from the premises.

How long does foreclosure take?

The foreclosure process can take some time, and up to a couple of years. The average foreclosure in the U.S. took 948 days, or about two-and-a-half years, as of the first half of 2022, according to ATTOM Data Solutions. In some states, the foreclosure process took four years, and some took nearly seven years.

However, you are allowed to remain in your home while the foreclosure process plays out. Once the house is sold, you will be asked to vacate the property. If you refuse, you will receive an eviction notice and law enforcement will remove you and your belongings from the home.

How to avoid foreclosure

Facing home foreclosure can be extremely scary. Fortunately, there are plenty of ways to avoid foreclosure, even if your current financial situation is making it difficult to pay your mortgage on time.

Ultimately, avoiding foreclosure starts by communicating with your mortgage lender or servicer. It is unlikely that your lender will let you off the hook completely, but it can help you take action so you do not lose your home.

Here are some of the best ways to avoid a home foreclosure:

Take advantage of forbearance programs: During the COVID-19 pandemic, the federal government established a mortgage forbearance program that has since expired. However, you can still apply for forbearance if you have a federally-backed loan from Fannie Mae or Freddie Mac.
Adjust your loan terms: If you are struggling to afford your monthly loan payment, ask your lender if they can adjust the terms of your loan. In exchange for a longer amortization schedule, you might be able to lower your monthly payment.
Get a deed-in-lieu of foreclosure: Some states allow homeowners to choose a deed-in-lieu of foreclosure, in which you agree to turn over your home to a lender in order to avoid a foreclosure. With this option, you are not required to pay your mortgage, but you might still be responsible for paying the difference between your home’s value and the mortgage balance.
Set up a repayment plan: If you know that you are unable to make your mortgage payment for a given month, let your lender know as soon as possible. Your lender can probably set up a payment plan that involves more frequent, but lower payments, or deferral for a month or two.

Consequences of foreclosure

There are several financial consequences to foreclosure, and they can be devastating. For one, getting a mortgage after foreclosure can be challenging because of the impact on your credit and the fact that you’ll likely be subject to a waiting period before having a chance at a new loan. The other implications of foreclosure include:

Losing your home, which puts you in the position of having to find a new place to live with a foreclosure on your record
Damage to your credit, since a foreclosure stays on your credit report for seven years
Losing your property and equity, which can have far-reaching impacts on your overall wealth
Owing money on the remaining balance if it’s a judicial foreclosure, and being subject to litigation, wage garnishment and more if you can’t pay

Bottom line

If you’re struggling to make your mortgage payments, your best bets to avoid foreclosure are time and communication. As soon as you realize you can’t pay your mortgage, reach out to your lender or servicer to learn about the options available to you. They might be able to set up a payment plan or allow you to defer the payment for one month if you have a temporary financial hardship.

Source: thesimpledollar.com